Gap Stock Jumps Nearly 10% On Q3 Earnings Beat

Share of Gap (GPS) are up 9% after the retailer beat Wall Street forecasts for its third quarter earnings.

The apparel company, which also owns brands such as Old Navy, Banana Republic and Athleta, reported Q3 earnings per share of $0.71 U.S. and revenue of $4.04 billion U.S., both of which were better than what analysts had expected.

However, the San Francisco-based company tempered expectations for the current fourth quarter and holiday sales period, saying its net sales could be down mid-single digits year-over-year.

The Q3 results were a significant improvement from a net loss of $152 million U.S., or $0.40 U.S. per share, in the year earlier period. Revenue was up 2% in this year’s third quarter.

The Gap attributed the strong Q3 results to progress made in reducing its inventory levels.

Total comparable sales, which include online and in-store revenue, rose 1% in Q3 compared with a year ago. Online sales rose 5% over last year and represented 39% of total sales at The Gap.

The company is looking for a new CEO after Sonia Syngal departed the company this past summer. The Gap also recently ended its relationship with singer Kanye West, taking a $53 million U.S. impairment charge related to its previous brand “Yeezy Gap.”

Prior to today, Gap’s stock was down 31% this year and trading at $12.71 U.S. per share.